Donner Company Case

EXECUTIVE SUMMARYThe Donner Company is a manufacturer of printed circuit boards. They need to address several issues in their supply chain operations to improve their service level because net income in the month of September has drastically decreased. Before September, growth was steadily increasing every month. They found that the major problems include unpredictable bottlenecks in manufacturing, lower than expected productivity and lower than expected quality and delivery. After addressing these major issues, I find that investing in more CNC’s and phasing manual drilling out of the manufacturing process can go a long way to improve the service level of the company.

BRIEF OVERVIEWThe Donner Company manufactures customized printed circuit boards. The market for electronic devices is increasingly favorable, so management is trying to figure out how to maximize profits in by tweaking their supply chain operations. There are several problems that will need to be addressed in the areas of manufacturing processes (preparation, image transfer, and fabrication), supervision, order processing, facilities and layout, current operating problems, productivity, and quality and delivery problems.

FACTS OF THE CASEThe three stages of the manufacturing process are preparation, image transfer and fabrication. In the preparation stage, a 12” by 18” standard panel has holes punched in it. Then, in the image transfer stage, the holes are drilled and then processed through a copper immersion bath, washed and dried and exposed to UV light. In the fabrication panel, each board is reduced to its desired size and shape.

The supervisors over the three phases are Diane Schnabs, Bruce Altmeyer and David Flaherty. Schnabs and Altmeyer report to the president and Flaherty reports to Altmeyer. Schnabs keeps track of orders processed an initiated. Altmeyer inspects the customer’s artwork requirements and looks to find design errors. Flaherty oversees all other aspects of managing from the beginning to the end of customer orders. Other employees are required to interrupt their tasks on average of six to twelve times per day to secure work for upstream processes, ask about a problem or deliver completed assignments.

The bottleneck in production shifts from one area of the production process to another, making it increasingly difficult to track the source of the problem. Flaherty had no way of predicting where work would pile up or run out. Flaherty also noted that only the small orders posed minimal problems.

The president felt that job methods could be substantially improved upon, however, Plummer is having trouble effectively analyzing the productivity of the shop. Fifteen percent of a plater’s time was spent walking between tasks. This time could be used for productive work.

Searby has noted that Donner Company has had trouble maintaining quality standards and meeting delivery dates. This is clearly a service level issue. Average customer returns increased from one to three percent and shipments average nine days late.

ANALYSIS OF THE CASELooking at Exhibit 1 – Donner Company Summary of Profit and Loss, it looks as if business has gone well until the last month (September). I cannot be sure of this because I have no records of the previous months of September, or around September, which could indicate seasonal changes in demand. Net income has fallen significantly from the previous month, down $11.7 million from $14.8 million. It appears that this decrease is a result of major increases in direct labor and manufacturing overhead and smaller increases in selling and administrative expenses.

Exhibit 2 – Standard Process Flow illustrates the most common sequence of operations. Clearly, drilling is the most time consuming part of the manufacturing process. Manual drilling is the number one most time consuming process and CNC drilling is the second most time consuming process. The next two...

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Introduction
DonnerCompany manufactures printed circuit boards (PCB) according to specifications of electronic manufacturers. It is one of the leading PCB manufacturers in United States. It started in 1985. The president of the company, Edward Plummer is reviewing the company position in October 1987, before deciding on plans for 1988.
CNC Vs Manual Drill Decision Rules
As per our analysis we recommend CNC or Manuals drill as per the decision login depicted in the table below. (Please refer to Appendix for calculation details).
Figure 3: CNC Vs Manual Drill Decision Table
CNC Router Vs Punch Press Decision Rules
Table below depicts the decision rule for scheduling CNC router or punch press.
Figure 4: CNC Router Vs Punch Press Decision Table
Capacity Analysis of DFPR
Let us assume an order size of 8.
As shown in table below, bottleneck is “Laminate &amp; Expose” process with time = 22 mins.
Hence the capacity = 1/22 per min = 60*8/22 per hour = 21.818 boards per hour.
Figure 5: Capacity Analysis of DFPR (Order Size of 8)
Also, we see that the bottleneck will always be “Laminate &amp; Expose” even if we vary the order size from 1 to 1050 or even more. This is because the run time is much higher than the other 2 steps.
The graph below depicts...

...DonnerCompany started its operations in 1985 and developed specialized capability in manufacturing circuit boards for experimental devices and for pilot production runs. The company uses “Solder mask over Bare Copper” (SMOBC) technology which is a popular technology for denser circuit patterns and more reliable final product. Automated processes as well as manual processes are used to perform medium-duty, short-cycle, repetitive tasks. They promise a delivery within three weeks for orders less than 1000 boards and 5 weeks for larger orders.
While reviewing the company’s position prior to planning 1988 operations, Edward Plummer, President of the company found that the firm was experiencing production delays due to serious problems in productivity, quality and delivery of products.
Problems with productivity:
In the case it was realized that it was impossible to evaluate shop productivity as it shifted from one pattern to another without any pre-specified pattern. Different order sizes imposed different workloads on various operations. These variations stemmed from difference in order size, from orders by-passing some operations and from difference in circuit designs. The methods in use were far from ideal and there was a large scope for improvement in most of the activities, but it was difficult to adopt improvements because of the current pressure for output.
Problems with delivery time:...

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DONNERCOMPANYCASE STUDY
SUPPLY CHAIN AND
OPERATIONS MANAGEMENT - 2015
Pr. Sam AFLAKI
Sophie LABBAN – MSIM 2015
INTRODUCTION
The three-year old DonnerCompany has positioned itself within both the small volume, customized printed circuit boards market as well as the large volume printed circuit boards market.
With 750 competitors in the US, and a market that is volatile, Donner’s engineering expertise to anticipate and resolve design problems enabled it to maintain its competitive edge. However, this competitive advantage is jeopardized by poor on-time delivery and high rate of product return, in addition to planning and manufacturing problems that caused unstable bottlenecks and improper utilization of labor. These problems began to impact the overall performance of the firm in terms of operations, productivity and quality.
Following is a detailed analysis of the current conditions of the company: its standard process flow, its capacity, its competitive edge and its biggest problems.
1. What is the normal process flow of the production system at Donner? What orders would you schedule on the CNC drill? On the CNC router?
Normal Process Flow:
I- Preparation Stage
Artwork generation
Inspect and Gear
Punch Tooling Holes
II- Image Transfer
Pinning panel to drill table
Drilling Holes whether manually or with the CNC drill
Drill Press...

...DonnerCompanyCase
Overview
DonnerCompany manufactures printed circuit boards for both large and small companies, specializing in experimental devices and for pilot production runs in the late 1980s. The circuit boards that it produces are made from thin sheets of narrow metal strips and insulating material. The process to produce each circuit board is very meticulous and involves many intricate steps. Their process, otherwise known as the “soldermask over bare copper” (SMOBC) process includes the preparation stage, image transfer, and fabrication.
The DonnerCompany faces problems with both the physical flow of production as well as information flow within the company. It does not have a consistent pattern of how its factory operates as variables changes from day to day because of problems that deal with the fabrication and the design of the circuit boards. More specifically the varying order size significantly changes the “Work in Process” and inventory at each step. Because of this, it is unable to properly identify the bottleneck since it changes frequently. As a result of this shift in bottleneck, employees that are qualified in more than one department are usually shifted to different jobs throughout the day. There was even one instance where 15% of the employees’ time were spent walking between the desk and the tanks.
Another...

...﻿1. The process flow diagram of the production system at Donner.
Preparation Stage
Imagine Transfer
Fabrication
2. What size orders would you schedule on the CNC drill? On the CNC router?
Time taken to process the orders depends on the selected drilling method either
a) Manual drilling or CNC OR b) Using CNC Drill
Assumption 1: Manual Drilling is not done on all the available Manual Drill Presses in parallel.
Calculating time taken for Manual drilling and CNC Drilling:
= Setup Time + Run Time (Per Hole) * No. of Holes drilled on each circuit board * No. of boards
Time taken for Manual drilling =15 + 0.08*500*x where x= number of circuit boards
Time taken for CNC drilling = 240 + 0.004*500*x where x= number of circuit boards
To figure out whether CNC drill to be used,
15 + 0.08*500*x ≥ 240 + 0.004*500*x
Hence x ≥ 5.92. This indicates that whenever 6 or more boards are needed to be drilled, manual drilling will take more time than CNC Drilling
Assumption 2: Manual Drilling is done on all the available Manual Drill Presses in parallel. Total no. of available manual drill presses = 7 (1 Panel per Manual Drill Press)
Total no. of Circuit Boards on Each 12”X18” Panel = 8
Hence total No. of Circuit Boards can be operated in parallel = 7*8=56 Circuit Boards
Time taken for Manual drilling on 1 Drill Press = Time taken for Manual drilling on All Drill Press = 15 + 0.08*500*8 =335 min.
Time taken for CNC drilling for 56 Circuit...

...Central Issues
When looking at the DonnerCompany in 1987, there are some initial concerns. The company as a whole does not have a true sense of how long it takes them to do what they do, and their process flow table is made up of "guesstimates", as throughput time at individual processes have not been formally taken. The company appears to be operating below capacity based on their need to rework their products often, find things for people to do, and meet deadlines that are based on fuzzy estimates, which only adds to the chaos. In short, there are three main issues facing the Donner Co.:
 &#61524;iming and delivery discrepancies
 Lack of quality control
 Need for labor utilization improvements
The addition of a new building in the near future provides a ray of hope, but the current operation and its capacity should be thoroughly understood before adding more to it.
Recommendations
Timing and Delivery
Careful analysis of the current situation, with the information provided, leads us to believe that one particular way to improve flow time and productivity is to purchase a second CNC Drill. The drill would allow a completed panel to exit the process every 12.5 minutes. It is also recommended that a second inspection station be added, as that would reduce the cycle time to 8.5 minutes. The most qualified of the underutilized staff could then also work in the inspection area and help reduce...

...The DonnerCompany manufactured printed circuit boards to specificaiton of a variety of electronics manufactures. It produces and sells goods to its customers. While EIIC is an insurance company which focus mainly on engineering insurance. It produces and sells service to customers.
Problems for DonnerCompany:
1. For operation problem, there is a production bottleneck exist in company’s operation, the shifting bottleneck. The shifting of process changed frequently from one to another in the manufacturing system. Every individual orders of different customers always change details because variable request or unqualified items. That will definitely bring our workers and workload a lot of trouble. At the same time, we have the pattern of four-day rush orders. This item will delay the process as it sometimes needs rework at one or two operations. It is due to workers are shifted from one operation to another one as demand’s changing so that some workstations are overloaded. But this situation only happened during bulk orders, while in short orders such as less than 8 circuit boards, Arthur Dief can finish it solo and perfect. Also, when the customer’s engineers have design problems, they are permitted to make a call to operation part which can interrupt normal production. That can be one problem which bothered the process. There is a policy that the shipment should be finished before end of a month,...